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[Senate Report 113-317]
[From the U.S. Government Publishing Office]

                                                      Calendar No. 542

113th Congress }                                             {  Report
                                 SENATE
 2d Session    }                                             { 113-317

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   TO DIRECT THE SECRETARY OF THE INTERIOR TO TAKE CERTAIN LAND AND 
  MINERAL RIGHTS ON THE RESERVATION OF THE NORTHERN CHEYENNE TRIBE OF 
MONTANA AND OTHER CULTURALLY IMPORTANT LAND INTO TRUST FOR THE BENEFIT 
         OF THE NORTHERN CHEYENNE TRIBE, AND FOR OTHER PURPOSES

                                _______
                                

             December 12, 2014.--and ordered to be printed

                                _______
                                

           Mr. Tester, from the Committee on Indian Affairs, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2442]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 2442) to direct the Secretary of the Interior to take 
certain land into trust for the Northern Cheyenne Tribe of 
Montana, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill, as amended, do 
pass.

                                PURPOSE

    The purpose of S. 2442 is to require the Secretary of the 
Interior to take certain land and mineral rights on the 
Northern Cheyenne Indian Reservation of Montana into trust for 
the benefit of the Northern Cheyenne Tribe, to transfer all 
amounts in the Tribe's Northern Cheyenne Trust Fund to the 
Tribe's Permanent Fund, and to inventory fractionated lands and 
report on the implementation of land consolidation activities 
on the Reservation.

                               BACKGROUND

    The Northern Cheyenne Tribe is one of seven federally-
recognized tribes in the state of Montana. The Tribe has an 
enrolled membership of over 10,800, nearly half of which reside 
on the Northern Cheyenne Indian Reservation. The Reservation is 
approximately 440,000 acres and is located southeast of 
Billings, Montana. Over 95 percent of the Northern Cheyenne 
Indian Reservation is held in trust for the Tribe and/or its 
members and nearly the entire subsurface estate is held in 
trust by the United States for the benefit of the Tribe.
    However, due to an error by the United States in 1900, 
5,000 subsurface acres within the Reservation were not 
transferred into trust ownership for the benefit of the Tribe. 
These subsurface tracts are currently owned in fee by Great 
Northern Properties. In 2002, the Tribe dismissed its lawsuit 
against the United States that concerned the transfer of coal 
tracts near the Reservation to the State of Montana in return 
for the United States' cooperation in re-acquiring the 5,000 
subsurface acres within the Reservation, among other 
consideration. In return for securing the subsurface tracts 
within the Reservation's boundary through this legislation, the 
Tribe would waive any claims it has against the United States 
related to the federal government's failure to secure those 
mineral interests for the Tribe in the early 20th century.
    Additionally, the Tribe owns numerous tracts of land in fee 
throughout the Reservation. The Tribe has acquired these tracts 
through its efforts to reduce fractionation of the land within 
the Reservation boundaries. This legislation would require 
these tracts of land to be held in trust by the United States 
on behalf of the Tribe.
    The Tribe also has adjudicated water rights that it secured 
through the Northern Cheyenne Indian Reserved Water Rights 
Settlement Act of 1992. A portion of that Act provided for a 
Trust Fund to enable the Tribe to develop its water rights and 
create other economic development opportunities. This 
legislation would enable the Tribe to exert greater authority 
over that Trust Fund.

                          NEED FOR LEGISLATION

    This legislation, S. 2442, is needed to complete a land 
transaction between the United States, the Tribe and a private 
landowner. The bill would divest the federal government of off-
reservation mineral interests in exchange for a private 
landowner transferring its on-reservation mineral interests to 
the Secretary, to hold the property in trust for the benefit of 
the Tribe. The legislation is also needed to extinguish any 
potential claims stemming from the United States' failure to 
secure the transfer of the on-reservation mineral interests to 
the Tribe in the early 20th Century. The legislation would also 
transfer all amounts in a settlement act trust fund into the 
Tribe's Permanent Fund, which requires Congressional action.

                          LEGISLATIVE HISTORY

    S. 2442 was introduced on June 5, 2014, by Senators Jon 
Tester and John Walsh. The bill was referred to the Committee 
on Indian Affairs. On July 9, 2014, the Committee held a 
hearing on the bill. On July 30, 2014, the Committee met at a 
business meeting to consider the bill. One amendment was 
offered and adopted, and the bill, as amended, was ordered to 
be reported favorably to the Senate by voice vote.
    There is a House companion bill, H.R. 4350; however, the 
bills are not identical. Additionally, another Senate bill, S. 
2256, was introduced on April 11, 2014, and referred to the 
Committee on Energy and Natural Resources. S. 2256 does not 
include the land consolidation provisions found in this 
legislation. Similar bills were also introduced in the 112th 
Congress (S. 647, S. 2110, and H.R. 1158).

                        SUMMARY OF THE AMENDMENT

    Chairman Tester filed an amendment in the nature of a 
substitute at a July 30, 2014, business meeting. The amendment 
made the following changes:

Fee to Trust Provisions

    Section 4 of the legislation would direct the Secretary to 
take certain tracts of land identified in two maps into trust 
for the benefit of the Northern Cheyenne Tribe. The amendment 
inserted a limitation excluding any land identified in the map 
located in South Dakota from being taken into trust by the 
Secretary pursuant to this Act.

Mineral Interest Conveyances

    The amendment removed a reference in section 5(a)(2)(A)(ii) 
to a 1984 Bureau of Land Management Resource Management Plan. 
The legislation, as introduced, would have kept the limitations 
of land use found in the Resource Management Plan in place for 
the tracts being transferred out of federal ownership. In its 
place, a new provision was added as section 5(a)(2)(C), which 
states that nothing in the legislation shall ``affect, abridge, 
or amend any valid existing rights of any surface owner of a 
specific tract or any adjacent tracts.'' These provisions are 
in addition to the protections required under subsection 
5(a)(2)(A), which requires surface owners to provide consent 
prior to any development of coal through techniques other than 
underground mining.

        SECTION-BY-SECTION ANALYSIS OF BILL AS ORDERED REPORTED

Section 1. Short title

    Section 1 provides that the Act may be cited as the 
``Northern Cheyenne Lands Act.''

Section 2. Findings

    Section 2 describes the Congressional findings related to 
the Act, including the history of the land the Northern 
Cheyenne Tribe seeks to have placed into trust for the benefit 
of the Tribe.

Section 3. Definitions

    Section 3 defines the key terms used throughout this Act.

Section 4. Tribal fee land to be taken into trust

    Section 4 mandates that the Secretary take 1,567 acres of 
land (specified by two maps dated April 22, 2014, and titled: 
(1) `Northern Cheyenne Lands Act-Fee-to-Trust Lands' and (2) 
the `Northern Cheyenne Lands Act-Fee-to-Trust Lands--Lame Deer 
Townsite') into trust for the benefit of the Tribe within 60 
days of the enactment of this Act. Subsection (b) includes a 
limitation prohibiting any tracts of land identified on the 
maps located within the state of South Dakota from being taken 
into trust pursuant to this section of the Act. This would not 
preclude the South Dakota land from going into trust via 
another legislative or administrative procedure.

Section 5. Mineral rights to be taken into trust

    Section 5(a) mandates that within 60 days of the Secretary 
being notified that a revenue sharing agreement remains in 
effect and Great Northern Properties has offered to convey its 
mineral interests on the Reservation to the Tribe, the 
Secretary shall convey certain federally-owned mineral 
interests to Great Northern Properties in exchange for Great 
Northern Properties' conveyance of its mineral interests on the 
Reservation to the Tribe. The Secretary will ensure that there 
is a covenant on the land that limits the method of mining 
available on the tracts conveyed to Great Northern Properties 
to underground mining techniques. Similar to the surface owner 
protections afforded by the Surface Mining Control and 
Reclamation Act, any other mining techniques are prohibited 
until a surface owner gives written consent to mine using other 
techniques on that surface owner's specific tract.
    Section 5(a)(1) contains a minor drafting error regarding 
the mineral estate transfer between the United States and Great 
Northern Properties. Both subparagraphs of that section should 
reference the same map, titled ``Northern Cheyenne Land Act--
Coal Tracts'' and dated April 22, 2014. That map depicts both 
the tracts that are to be transferred from Great Northern 
Properties to the Secretary to be held in trust for the benefit 
of the Tribe, and the tracts that are to be transferred from 
the United States to Great Northern Properties. However, 
subparagraph (B) contains an error by referencing the incorrect 
title of the map. Subparagraph (B) should be read to reference 
the ``Northern Cheyenne Land Act--Coal Tracts'' map dated April 
22, 2014, which is the same map correctly referenced in 
subparagraph (A) of the same section.
    Section 5(b) states that the mineral interests on the 
Reservation conveyed to the Tribe shall be held in trust by the 
Secretary upon request by the Tribe and the mineral interests 
shall not be subject to taxation by the State. Section 5(c) 
requires the revenue sharing agreement between the Tribe and 
Great Northern Properties be in place and remain in effect 
prior to the transfer of any mineral interests under this 
section.
    Section 5(d) contains a waiver of all legal claims against 
the United States for the failure of the United States to take 
the 5,000 acres of subsurface mineral interests into trust on 
behalf of the Tribe any and all claims by Great Northern 
Properties against the United States relating to the value of 
the coal mineral interests. Section 5(e) describes the ability 
of the Secretary or Great Northern Properties to rescind any 
conveyance made pursuant to the Act within one year of any 
mineral interests conveyed under the Act being invalidated by a 
final judgment of a federal court. If any conveyances are 
rescinded under subsection (e), the legal waivers found in 
subsection (d) shall no longer apply.

Section 6. Transfer of Northern Cheyenne Trust Fund to tribe

    Section 6(a) mandates that within 30 days after enactment 
of this Act, all amounts in the Northern Cheyenne Trust Fund 
shall be deposited in the Tribe's Permanent Fund. Subsection 
(b) states that the funds that are attributable to the 
principal of the Northern Cheyenne Trust Fund will be 
continually maintained and any interest earned on the principal 
will be used in the same manner as interest earned in the 
Permanent Fund. Subsection (c) states that the Tribe waives any 
and all claims arising from the management of the Northern 
Cheyenne Trust Fund by the United States.

Section 7. Land consolidation and fractionation reporting

    Section 7(a) requires the Secretary, in consultation with 
the Tribe, to inventory the fractionated land interests held by 
the United States for the benefit of the Tribe or individual 
Indians on the Reservation. The inventory is required to 
include details about the fractionated land on the Reservation 
that is suitable for agricultural purposes. The Secretary will 
submit the inventory to the Senate Committee on Indian Affairs 
and the House of Representatives Committee on Natural Resources 
within 180 days of enactment of this Act. Subsection (b) 
requires the Secretary to prepare annual reports for the first 
five years that discuss (1) the obstacles of consolidating 
fractionated trust land ownership, (2) the progress achieved 
toward reducing the level of fractionation, (3) an analysis of 
the progress made to making agricultural use economical, and 
(4) any applicable outcomes or lessons learned from land 
consolidation activities.

Section 8. Eligibility for other federal benefits

    Section 8 provides that the transfer of the trust fund 
under section 6 will not reduce or deny any Federal service, 
benefit, or program to the Tribe or tribal member to which the 
Tribe or tribal member is entitled to as a federally-recognized 
Indian tribe or member thereof.

Section 9. Authorization of appropriations

    Section 9 authorizes the appropriations of the sums 
necessary to carry out this Act.

                   COST AND BUDGETARY CONSIDERATIONS

    The following cost estimate was produced by the 
Congressional Budget Office on August 28, 2014.
    Summary: S. 2442 would require the Bureau of Land 
Management (BLM) to convey 9,400 acres of land containing coal 
deposits to Great Northern Properties, a private company, if 
the company conveys certain mineral rights to the Northern 
Cheyenne Tribe. The land conveyances would not be finalized 
unless the tribe waived all claims related to the failure of 
the United States to acquire certain mineral rights underlying 
the tribe's reservation land. The bill also would direct the 
Secretary of the Interior to compile an inventory of land 
interests held in trust by the federal government for the 
benefit of the tribe.
    Based on information provided by BLM, the tribe, and firms 
operating in the coal industry, CBO estimates that enacting the 
legislation would reduce net offsetting receipts (thus 
increasing direct spending) by $2 million in 2024; therefore, 
pay-as-you-go procedures apply. Enacting the bill would not 
affect revenues and would have no significant effect on 
discretionary spending.
    S. 2442 would preempt the authority of state and local 
governments to tax land and mineral interests conveyed to the 
Northern Cheyenne Tribe of Montana. Those requirements would be 
mandates as defined in the Unfunded Mandates Reform Act (UMRA), 
but CBO estimates that the costs of the mandates would be 
minimal. The bill would benefit the Northern Cheyenne Tribe of 
Montana. The bill contains no private-sector mandates as 
defined in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 2442 is shown in the following table. 
The costs of this legislation fall within budget functions 300 
(natural resources and environment) and 450 (community and 
regional development).

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                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2015   2016   2017   2018   2019   2020   2021   2022   2023   2024  2015-2019  2015-2024
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                                                               CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority..................................      0      0      0      0      0      0      0      0      0      2         0          2
Estimated Outlays...........................................      0      0      0      0      0      0      0      0      0      2         0          2
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    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the end of fiscal year 2014.
    Forgone receipts from bonus bids: S. 2442 would require BLM 
to convey 9,400 acres of federal land containing coal deposits 
to Great Northern Properties.
    Based on information provided by BLM and firms operating in 
the coal industry, CBO estimates that the affected lands 
contain 113 million tons of coal. CBO expects that, under 
current law, the federal government will lease lands containing 
up to 90 percent of that coal starting by 2024 or possibly 
later. Based on information regarding recent bonus bids paid 
for federal lands in western states containing coal, CBO 
expects that firms would pay about 35 cents per ton to lease 
the affected land, and we estimate that the bonus bids for 
those leases would total about $36 million. Because firms 
generally pay bonus bids on coal leases in five equal 
installments over a five-year period, CBO estimates that gross 
proceeds from bonus bids (before the government pays states 
their share) would be about $7 million a year. We assess a 50 
percent chance that the lease sale would occur in 2024 and an 
equal chance that it would not occur until later. Therefore, 
accounting for that uncertainty, we project a loss of receipts 
(before payouts to states) of $3 million to $4 million per 
year. Because BLM would distribute 49 percent of those proceeds 
to the state of Montana, we estimate that enacting the bill 
would reduce net offsetting receipts by $2 million in 2024.
    CBO also estimates that conveying the lands would not 
affect offsetting receipts from royalties because any 
production on those lands would not occur until after 2024 
under current law.
    Waiver of claims: The Northern Cheyenne Tribe asserts 
claims against the federal government because the government 
did not acquire mineral rights on lands that were added to the 
reservation in 1900. Under the bill, the tribe would waive 
those claims. CBO expects that any litigation related to the 
claims would not be completed or settled within the next 10 
years. Therefore, we estimate that the waiver of those claims 
would not affect direct spending during the next decade.
    Pay-as-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. S. 2442 would reduce the amount of offsetting 
receipts that would be deposited in the Treasury from certain 
coal leases; therefore, pay-as-you-go procedures apply. The net 
changes in outlays that are subject to those pay-as-you-go 
procedures are shown in the following table.

 CBO ESTIMATE OF PAY-AS-YOU GO EFFECTS FOR S. 2442, THE NORTHERN CHEYENNE LANDS ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL RESOURCES ON
                                                                      MAY 29, 2014
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                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2014   2015   2016   2017   2018   019    2020   2021   2022   2023   2024  2014-2019  2014-2024
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                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.......................      0      0      0      0      0      0      0      0      0      0      2         0          2
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    Estimated intergovernmental and private-sector impact: S. 
2442 would preempt the authority of state and local governments 
to tax land and mineral interests conveyed to the Northern 
Cheyenne Tribe of Montana. Those requirements would be mandates 
as defined in UMRA, but CBO estimates that the costs of the 
mandates would be minimal. The bill would benefit the Northern 
Cheyenne Tribe of Montana. The bill contains no private-sector 
mandates as defined in UMRA.
    Previous CBO estimate: On July 18, 2014, CBO transmitted a 
cost estimate for H.R. 4350, the Northern Cheyenne Lands Act, 
as ordered reported by the House Committee on Natural Resources 
on May 29, 2014. The two bills are similar, and the CBO cost 
estimates are the same.
    Estimate prepared by: Federal Costs: Jeff LaFave and Martin 
von Gnechten; Impact on State, Local, and Tribal Governments: 
Jon Sperl; Impact on the Private Sector: Marin Burnett.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

               REGULATORY AND PAPERWORK IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that S. 2442 will 
have a minimal impact on regulatory or paperwork requirements.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 2442.

                        CHANGES IN EXISTING LAW

    In accordance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that the 
enactment of S. 2442 will not make any changes in existing law.
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